new at RE investing and need help. - Posted by David Womack

Posted by David Womack on May 24, 1999 at 18:11:38:

I recently went to a Russ Whitney seminar (please no opinions on that) and became very interested in the possibilities of Real Estate Investing, but have absolutely no experience in the area.

My problem:
As I said, I only recently learned about REI (last Thursday) and over the weekend I had someone offer me some property for, what appears to be, a discount.

the property is a 4 bedroom, 2 ba on .2 acres in a middle-class neighborhood of Sierra Vista AZ with a community swimming pool. The property is in good condition. a small yard with a gold fish pool (probably not important for this forum but I thought I’d mention it).

THe owner is looking to complete a non-realtor deal. A very motivated seller but says he will turn to rental if doesn’t get want he wants.
orginally bought in 1994 for 83000 but part of this was in assuming a 69000 loan.
Refinanced in 1995 at 7.6% for 15yrs. Payments are 728/mo
claims he owes 60000. Wants 78000 - 80000 (or rather wants 20000 after the deal - owes 25000 to his mom).
I don’t know just yet what comparable houses are selling for in his area, however, a 2 bedroom 1ba 2 doors down from him is selling for 72000.

Mortage with GMAC. Doesn’t know if the mortgage is assumeable.

MY Questions:

  1. what would be the right way to proceed?
  2. how do I structure the financing in order to capitalize the most from the deal.
  3. how do I get title (through a Title company I assume) and other paper work.
  4. do I need and should I get a lawyer.
  5. more questions I can’t think of at the present.

I want to purchase for a discount if possible, turn around and resell or rent if my cash flow is adequate.

I have been thinking of assuming his loan at 60000, refinance for 30 yrs at appraised value (neighborhood of 95000) and rent until I can sell. Pay him 15-20000 as downpayment and pocket the extra 10000 after which I will rent until I can sell.

Does this make sense??? And how should I approach him and how should I approach a bank.

I realize this looks like “hand holding” and probably is but I am hoping someone here can point me in the right direction.

any opinions or advise would be greatly appreciated.

David Womack